Campaign Finance Reform

March 20, 2001

Congress is in the midst of a battle over campaign finance reform, yet it
is likely that when all the dust settles none of the bills under
consideration will pass. In the past, Democrats have been the primary group
pushing for banning "soft money" (funds contributed to political parties for
uses other than for particular candidates). But in the last election cycle,
Democrats actually did better at raising soft money than Republicans. So
some Democrats are starting to have second thoughts about banning the use of
soft money.

Two bills are under consideration. The McCain-Feingold bill would ban
national parties from soliciting, receiving, directing, or spending soft
money. State parties would also be prohibited from spending soft money on
federal-election activities such as "issue ads" that promote or attack a
federal candidate. The Hagel-Landrieu bill would allow national parties to
continue to receive soft money but puts a cap at $60,000 per donor a year or
$120,000 for a typical two-year election cycle. There would be no
restrictions on how state parties spend their money.

Central to the desire for campaign finance reform is the conviction that
Washington is awash in campaign contributions and that lobbyists and
corporation buy access and influence through these contributions. But
banning contributions or setting limits is not easy to do and may even be
unconstitutional.

Back in 1974 in the post-Watergate era, Congress passed a bill placing
spending limits on congressional campaigns. The spending limit for the House
was $75,000 while the spending limit for the Senate started at a base of
$250,000 and varied with a state's population. The Supreme Court declared
these limits unconstitutional before the 1976 elections.

If the law was not declared unconstitutional, the net effect would be the
nearly certain re-election of every incumbent. It is inconceivable that a
challenger could unseat an incumbent House member for less that $75,000.
Incumbents benefit from congressional privileges (e.g., regular mailings to
constituents, franking privilege, etc.) as well as visibility and name
identification. Placing a limit on campaign spending would almost always
benefit the incumbent.

But the more important question is whether campaign finance reform is
constitutional. The Supreme Court has argued that this is a First Amendment
issue. After all they argue, political speech depends on political spending.
If you limit spending, you effectively limit speech. The justices ask,
Would the constitutional right to travel be abridged if government limited
everyone to spending only enough for one tank of gasoline? The answer, of
course, is yes. Likewise, will a limit on political spending limit one's
political speech. Again, the answer should be obvious.

The question political commentators should be asking during this debate
is not whether campaign finance reform will pass the Congress. The question
they should be asking is whether the Supreme Court will declare it
unconstitutional.